Apple rolled out its new music service today. It has the very original name of Apple Music. Onstage the company said it would transform the listening experience for fans, and the creative act for artists. But by and large the service offers features you can already find in the market. The one place where did draw a line in the sand was on price. Apple offers a family plan that can be shared by up to six people for $14.99. Spotify and Rdio also offer family plans, but those cost $14.99 for two people, and $29.99 for five.
Spotify plans to offer competitive pricing
How will the industry react? It seems Apple's biggest competitor hopes to match its offer. "We already have similar family pricing in some markets and we expect to offer competitive pricing everywhere in the near future," said Jonathan Price, Spotify's global head of communications and public policy. He pointed out that in Sweden, Spotify already charges roughly $20 a month for a family of five. The Verge has reached out to other services for comment as well.
This leaves a big question: did Apple negotiate an incredible deal with the music labels? Or did it decide to spend some of the $150 billion in cash it has in the bank to subsidize a very generous package? If the industry reacts by matching Apple's prices, does that mean the labels are simply willing to offer consumers a better deal, or is Apple forcing its competitors to further trim their already very thin margins? It's worth noting the deal is very similar to one previously offered by Beats Music in partnership with AT&T. Beats was of course subsequently acquired by Apple, and the FAQ for Apple Music still directs to the Beats website for now.